Navy Lifts Unisys Suspension; Firm Will Pay $200,000

WASHINGTON — The Navy Friday lifted its 3-month-old suspension of three units of the Unisys Corp. after the company agreed to reimburse the Navy $200,000 and clean up its defense contracting procedures.

The suspension, which barred the Unisys subsidiaries from bidding on all government contracts, was imposed March 15 after four former company executives and consultants pleaded guilty to bribing Navy officials and making illegal campaign contributions to members of Congress.

The action was part of the continuing Ill Wind investigation into corruption in the military procurement system.

At the time, the Navy cited Unisys for "egregious" and repeated misconduct, including bribery of government officials, expense account abuses, improper use of consultants for lobbying purposes and improper corporate campaign contributions.

The suspension was lifted after Unisys agreed to pay $200,000 to cover the Navy's costs of investigating the firm. Unisys also promised to enforce a corporatewide ethics program and to improve contract compliance.

"We are satisfied they are now a responsible contractor," a Navy spokesman said.

The agreement runs for five years but does not absolve Unisys of any criminal or civil liability arising from the Ill Wind case. Federal investigators say that the company remains under scrutiny for its role in the procurement scandal.

In a statement, Unisys said that it was "pleased" with the Navy's action. The firm said that it was talking with federal authorities about a possible settlement of charges from the Ill Wind inquiry and "the company remains committed to reaching speedy resolution of all issues relating to that investigation."

Unisys, which was formed by the 1986 merger of Sperry Corp. and Burroughs Corp., is the nation's 15th-largest defense contractor. All of the alleged abuses took place at former Sperry units: Shipboard & Ground Systems, Great Neck, N.Y.; Computer Systems division, Eagan, Minn.; and Communications Systems division, Salt Lake City.